NLCINDIA.NS WACC - Weighted Average Cost of Capital

The WACC of NLC India Ltd (NLCINDIA.NS) is 11.2%.

The Cost of Equity of NLC India Ltd (NLCINDIA.NS) is 14.35%.

The Cost of Debt of NLC India Ltd (NLCINDIA.NS) is 9.30%.

	Range	Selected
Cost of equity	12.80% - 15.90%	14.35%
Tax rate	33.40% - 37.50%	35.45%
Cost of debt	8.10% - 10.50%	9.30%
WACC	10.0% - 12.4%	11.2%

WACC

NLCINDIA.NS WACC calculation

Category	Low	High

Long-term bond rate	6.9%	7.4%
Equity market risk premium	8.3%	9.3%
Adjusted beta	0.71	0.86

Additional risk adjustments	0.0%	0.5%
Cost of equity	12.80%	15.90%

Tax rate	33.40%	37.50%
Debt/Equity ratio	0.6	0.6
Cost of debt	8.10%	10.50%

After-tax WACC	10.0%	12.4%


Selected WACC	11.2%

NLCINDIA.NS's CAPM model and how its cost of Equity is calculated

The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.

This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.

Here’s how we figure out the cost of equity for NLCINDIA.NS:

cost_of_equity (14.35%) = risk_free_rate (7.15%) + equity_risk_premium (8.80%) * adjusted_beta (0.71) + risk_adjustments (0.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.